From St. Louis to Global Tech Leader ft. Jim McKelvey

Good morning, Keith. I'm embarrassed because I was late to this call, but aside from that, it's not the most embarrassing thing I've done this week, so we're good.

I mean, born and raised in St. Louis. Went to WashU, really didn't leave town much except to do a little studying overseas and then started a company straight out of school. I was not terribly successful with that first company, although it still exists. It's still running in St. Louis 30 something years later and it still makes money. So I guess it did work. Opened Third Degree Glass Factory about 20 years ago. Major glass center. We're trying to build that area of town back. It was a bombed out mess when we got there and now it's looking a little rough because of the tornadoes, but you know, I'd say the best restaurants in town are, you know, all within a block of my glass studio now. So, that's pretty cool.

Yeah. And then I'm doing a lot of stuff downtown. So the maker district is the thing on Delmar and then downtown we have this, you know, well we've got the NGA coming in and we thought a, you know, sort of resurgence of businesses located downtown would be good. So Square's got an office down there. We've got some other cool companies going to be down there. And you know we're trying to get the city to, you know, have some corporate legs again.

Well, I mean, I've got nothing against crying or depression, but I would say the best lesson that I learned with Mira, which is still a company that runs and I own, is that I'm not a good manager. You know, we started Mira. I was the CEO and then the company really didn't get successful until I stepped out of the CEO role and just became a product guy. Like I'm good at building things and I'm also, you know, willing to take risks that probably seem insane to other people. But I'm not good as a manager. So once things are set up and running, you want me out of the way. And that was a tough lesson at Mira because I was, you know, following the model of Bill Gates at the time who, you know, started Microsoft and then ran Microsoft and was, you know, very successful at that. There are a lot of examples of these founders who become great CEOs and I thought I could do that and it turns out it's not me. I'm not a great leader. I'm at best somebody who can build stuff and I attract great talent. That's the other thing that's been very helpful.

I mean, there were a couple. It depends what you consider the spark. The first was reconnecting with Jack Dorsey who was my intern at Mira and you know he and I had been friends and colleagues for you know I guess probably 15 years before. And I was drawn to reconnect with Jack because they tore out the streetcar tracks on Delmar. And I remember Jack and I had this conversation, you know, back when he was in high school about how much he hated GM and the things that they did to the cities to basically pull out infrastructure that connected us. And I saw a physical example of this on Delmar Boulevard when they were, you know, redoing the lanes. They exposed the old streetcar tracks and I was like man that really sucks that we used to have this thing that connected everybody in St. Louis and they removed it like to remove infrastructure that's transportation just insane but that's what happened and it divided us up as a city and I was very upset and I called Jack just, you know, sort of out of frustration that led to a bunch of conversations. Jack asked me to start a company with him and we decided that we would go build something for mobile phones but neither one of us had a real idea about what that company was going to be but we had already hired a guy to start developing the mobile app and we didn't know what the mobile app was going to be. And I went back to St. Louis to pack up my stuff and I was in my glass studio. A lady called in and wanted to buy a piece of glass and I couldn't take the sale because she only had an Amex card. And so I lost that sale and was very frustrated. So I, you know, I had my mobile phone and I thought, well, why doesn't this mobile phone allow me to do this sale that I need to do? Because, you know, my attitude towards a mobile device is that it magically turns into whatever I need it to be. You know, it's a book, it's a TV, it's a map, it's a flashlight, you know, it just magically becomes whatever device I need. And it didn't do that. And so I thought, well, I will talk to Jack about making this what we do. And Jack loved the idea. So that's what became Square. We set off, this was about 16 years ago, and we made a lot of headway because nobody had ever thought this way before. Nobody thought it was possible to bring the level of financial access to the people that we were going to serve which were small people. So we really focused on the disenfranchised and to this day I think it's still sort of the core of the company is, you know, the little folks who don't otherwise, you know, get a fair shake.

Yeah, I got a whole book on this. Look, the worst thing that could happen if you're a startup is Amazon decides they want your business because Amazon is 100% successful in killing startups. It just goes in, steals whatever you're doing, adds the Amazon brand name, and just watches you die. And this always works. There's only one case of it not working and that was us. And so the question is, well, why was Square the only company to ever survive an attack by Amazon? And I spent three years researching that. And what I basically came up with was this idea that we built this thing in a way that protected us. And yeah, I won't give you 300 pages here, but the bottom line of my book is that there are effectively two worlds. There's the world you live in almost all your life, which is the world of copying. It's the world of doing stuff the way everybody else does it. And that's good. Like there's nothing wrong with that. Like copying is how we survive. Like you don't copy failures, you copy successes. And successes are fairly rare. So if you get something that succeeds, you want to replicate it. But the problem is we are so wired to copy, you know, down to our literal DNA. But certainly all our culture, all our institutions, everything basically supports you if you're copying somebody else's proven model. But if you're not, you end up in this weird world that nobody even talks about. And that's the world that I describe in my book. And Square, for a bunch of weird reasons, was forced into this other world. We couldn't copy what was working for other, you know, credit card processors for a bunch of technical reasons. So we were forced to build all this new stuff and that new stuff turned out to be something that even Amazon couldn't replicate. So when Amazon decided they would steal our market they lasted a year and then they had to quit and that was amazing. And so what I go through in the innovation stack is the mechanics behind creativity and innovation. And nobody really talks about it. It's a poorly understood subject. And like these days, it's funny. I probably shouldn't name the name of the corporation, but it is like one of the biggest entertainment corporations in the world called me last week and said, 'We're having trouble coming up with new ideas.' And this is, I can't use the name of the company, but like these guys are sort of ground zero for creativity. Some of the most imaginative people on the planet. And they're having trouble. So they're coming to me for this. And so it's a really weird world to have because nobody talks about creativity in a way that I think is actually honest.

Oh, as an author, I have to, I got my book. I got myself a shame behind me, my book.

I mean, it's always a great new world to innovate. Like there's never a time in human history where that was not a true statement. Things are certainly changing right now. But if I had to give advice to someone who was younger, somebody who was old, I mean like anyone who is facing change, my advice would be that you have been mistaught change by people who are trying to sell you watches and sports cars. You've been brainwashed by a very powerful ecosystem that's trying to sell stuff. And unfortunately, what you would need to do to do something original is deeply unpleasant. Like it is rough, lonely, terrifying stuff. Now, you can avoid that and still be called an entrepreneur by doing something that everybody else has done. Like you open up a, you know, coffee shop, you can open up a bakery, you can do any one of a million businesses where they'll say, 'Oh, you're an entrepreneur because you started a business, but you don't have to invent that business.' So if you want to open, you know, a chain of salad bars, well, the salad bar has been done. You know, you can go to 50 of them and copy their models. So, my recommendation to most people is don't try to be original. Like, don't think about that as this thing you have to do. Think about something you care about, a problem that is important to you and use that as your north star and then try to solve that problem. Now, if you can solve it using proven techniques, great. Do that. If you come up against a problem that has not been solved before, then you find yourself in the area that my book covers, which is this idea that you're doing something for the first time and now you are truly alone. So, that's a different world and that's what I describe in the book and it is a lonely world. And the reason I wrote the book, I mean, I'll save everybody 300 pages, is most people their entire lives will never face a challenge that hasn't been solved. There's always an expert or YouTube or something you can, you know, download. Only a few times in your life, Keith, are you going to be in a situation where you care about a problem and nobody else has figured out how to solve it. That'll happen a dozen times in your whole life. So what happens when you encounter one of those moments, okay? Well, the first thing that will happen and I've studied this is your fear will kick in because the rest of your life you have been used to being qualified to do something or at least if you were unqualified, you were sort of consciously unqualified. Like you would say, well, you know, I'm going to ride this motorcycle and maybe I don't really know what I'm doing, but like you could get training on how to ride a motorcycle. But the analogy I use all the time is the Wright brothers, you know, were they qualified pilots? You know, I mean, Orville and Wilbur, they flipped a coin, they got in the plane, and they took off. Now, were either of them qualified to fly that device? And the answer is no. They couldn't be. You can't get training on this thing that humanity has never done. And therefore, if you think about it, the progress that we make as a species is made by unqualified people. The first time somebody does it, by God, they are not qualified to do that thing. They can still do it. But what I saw again and again, and I dedicated the book to somebody who exhibited this, was these wonderful people who have great skills and the potential to solve great problems quit because they said, 'Oh, I'm not qualified.' And my whole life, I've trained myself that if I'm not qualified, I'm not going to do this thing. But that's the wrong way to look at a new product.

I would say if you're not playing with it, you're being left behind. And what people do is, especially if they're a knowledge worker, you will and probably should feel very threatened by this technology. And what you will realize is that 80% or more of your skills, these things that you've spent years learning how to do have just been rendered irrelevant. And it's terrifying. So, I'm an engineer by training. I'm a programmer. My entire college education has been wiped out. I no longer need anything I learned like in the technical part of my education. And that's terribly scary. And I see people respond through either denial, which is rampant, or through this sort of rebirth where you say, 'Oh god, it's like my whole house burned down except for this one room where a couple of objects survived and I got to go forward with only those objects.' All right. And it's terrifying. So AI is really cool. It allows you to do amazing things, but it also allows other people to do amazing things that you used to be able to do and now they don't need you. So my recommendation is learn the stuff and learn where the AIs are falling short and then recognize that you've been given this super powerful tool, but it is going to wipe out a lot of the things that you think represent you. And that's just scary as hell.